easyJet slams CAA advice on Stansted

17th Oct 2007

easyJet has called on the UK’s Department for Transport to reject the advice
of the Civil Aviation Authority and ensure that passengers at
London Stansted Airport ‘continue to be protected from BAA’s market
dominance.‘The company released a statement which reads:

In July, the CAA recommended to the DfT that Stansted should be
“de-designated” - i.e departure rates for passengers should no longer be
regulated, and BAA should be free to charge whatever it wants.

easyJet has today submitted its evidence to the DfT which argues that
price controls MUST be retained at Stansted to safeguard passengers and
airlines from the BAA’s market power. This would also mean that the
airport would continue to be regulated for service - BAA has just been
reprimanded for poor service at Heathrow and Gatwick airports, yet
de-designation would remove the service penalties from Stansted and the
financial incentive for operational excellence. easyJet’s evidence is
accompanied by a detailed report from Frontier Economics setting out the
failures in the analysis provided by the Economic Regulation Group of
the CAA.


easyJet demonstrates that:


*      Stansted has significant market power over airlines, and
therefore passengers - and that without regulation Stansted will be able
to increase prices


*      East Midlands is not an alternative to Stansted airport, this is
common sense, but not the belief of the CAA


*      There are significant gaps in the CAA’s analysis, which the CAA
has effectively ignored



easyJet Chief Executive, Andy Harrison, said:


“The fact the current airport regulatory system is fundamentally flawed
is no justification for the CAA’s cop out proposals. Consumers need
proper protection from BAA’s market dominance at Stansted in terms of
both getting value for money and a better airport experience. Stansted
needs tougher regulation not these ‘head in the sand’ proposals from the


“It is bizarre that the Competition Commission has recently suggested
tougher price controls and service penalties at Gatwick and Heathrow and
yet the CAA is proposing the very opposite for Stansted. This
demonstrates the CAA’s lack of understanding of how the London airport
market operates.”


“The importance of effective regulation of our major monopoly-controlled
airports is reinforced by the UK’s policy of allowing these key
infrastructure assets to be internationally traded, often on a highly
indebted basis, which strongly encourages the new owners to set short
term profit maximisation at the expense of the consumer.”


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